Tequila is a distilled spirit made from a plant known as the "blue Agave.” Contrary to a common misconception, tequila is not made from cactus juice. The blue Agave (Agave Tequila Weber, blue variety), also known in Mexico as maguey (mah-gay), is classified as a member of the Aloe family.

In Mexico, the plant has long been referred to as the "plant of the gods."A distilled blue Agave beverage may only be called tequila if it is made from Agave plants grown in one of the specified regions of Mexico: the state of Jalisco and certain villages in neighboring Mexican states, as allowed by law. These are the approved regions for tequila production according to the Mexican regulations that govern it.

Most tequila is produced in the state of Jalisco, in or around the town of Tequila.Tequila must also be made according to specified processes in its cultivation, fermentation and distillation. To bear the name "tequila," the beverage must also contain 51% fermented juices from the blue Agave plant. The other 49% may be comprised of other sugars. Premium tequilas, however, are generally made from 100% blue Agave juice.

Standards for most aspects of tequila production, including aging and labeling, are defined in a set of laws called the Norma Oficial Mexicana. The final Tequila product is an 80 proof / 40% alcohol by volume distilled spirit.